Bookkeeping is a standardised and well refined process through which individuals and organisations record history of affairs. There are generally two methods of bookkeeping i.e. single entry bookkeeping and double entry bookkeeping.
So, as a layman, why is it important for you to understand bookkeeping? To explain, let me give you an example. Suppose you are going on a hike to Mount Warning (a place just on the border of Queensland and New South Wales). It is going to be a memorable trip since you are taking your kids along for the first time on such a challenging track. You would want to record every moment of this adventure.
You have the following choices:
- GoPro with 2.7k recording
- video camera with 1080p recording
- Phone with VGA recording
Which one would you prefer? (assuming you have all three available). I am confident you would prefer the GoPro being handy, sturdy and with the highest recording resolution. Why? Because you would want to see these videos again and again to cherish the loving memories!
Your business is just like an adventure! The only difference is, you cannot record every activity of the business with a real camera. To record every aspect of your business, there are tried, tested and standardised methods and tools. You can either use a VGA device (single entry
bookkeeping) or you can use GoPro (double entry bookkeeping). The more importance you give to this process of bookkeeping, the more detailed and granular information you will be able to capture about your business. This in turn will enable you to extract meaningful information from your records, being the foundation of your decision making process.
So, be careful who you choose as your cameraman for your business i.e. bookkeeper. Ensure that your bookkeeper is expert in capturing the transactional record in a most accurate, reliable, timely and professional manner with the best tools in the market. In the end understand that it is YOU who will need the information. Therefore, “as you sow, so shall you reap“.